NELCO.NS
Nelco Ltd
Price:  
846.00 
INR
Volume:  
52,785.00
India | Communications Equipment
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NELCO.NS WACC - Weighted Average Cost of Capital

The WACC of Nelco Ltd (NELCO.NS) is 14.1%.

The Cost of Equity of Nelco Ltd (NELCO.NS) is 14.25%.
The Cost of Debt of Nelco Ltd (NELCO.NS) is 9.10%.

Range Selected
Cost of equity 12.50% - 16.00% 14.25%
Tax rate 29.30% - 30.10% 29.70%
Cost of debt 9.10% - 9.10% 9.10%
WACC 12.3% - 15.8% 14.1%
WACC

NELCO.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.68 0.88
Additional risk adjustments 0.0% 0.5%
Cost of equity 12.50% 16.00%
Tax rate 29.30% 30.10%
Debt/Equity ratio 0.03 0.03
Cost of debt 9.10% 9.10%
After-tax WACC 12.3% 15.8%
Selected WACC 14.1%

NELCO.NS's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for NELCO.NS:

cost_of_equity (14.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.68) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.